TEL AVIV, Israel, Nov. 20, 2019 (GLOBE NEWSWIRE) -- Bank Hapoalim (TASE: POLI) (ADR: BKHYY), today announced its financial results for the third quarter ended September 30, 2019.
Key financial highlights:
- Net profit - totaled NIS 736 million, compared with a net profit of NIS 950 million in the corresponding quarter of 2018, a decline of approximately 22.5%.
- Return on equity (ROE) - totaled 7.6%, compared with 10.7% in the corresponding quarter of 2018.
- Net profit in the third quarter of 2019 was impacted by negative CPI of 0.7% (NIS 76 million) and the Bank's decision to accelerate the sale of its banking activity in Turkey.
- The Bank recorded a loss of impairment of approximately NIS 63 million with regards to its investment in Bank Pozitif (Turkey). Excluding this effect, net profit in the third quarter totaled approximately NIS 798 million (ROE of 8.3%).
- Dividend payment - NIS 1 billion paid in dividend with respect of capital surplus generated as a result of the sale of 65% of Isracard Ltd.
- Common Equity Tier 1 capital ratio - stood at 11.87% as at September 30, 2019, surpassing both regulatory and internal capital targets.
- Net credit to the public - totaled NIS 291.0 billion, compared with NIS 282.5 billion at the end of 2018, an increase of 3.0%.
Housing loans, totaled NIS 87.3 billion, compared with NIS 81.5 billion at the end of 2018, an increase of 7.2%.
Commercial credit, totaled NIS 40.0 billion, compared with NIS 37.5 billion at the end of 2018, an increase of 6.7%.
Recent mentions:
- Mr. Dov Kotler took office as CEO of the Bank on October 1, 2019 replacing Mr. Ari Pinto.
- On September 24, 2019 the Board of Directors declared the distribution of dividend in the amount of NIS 1 billion, with respect of the capital surplus generated by the sale of 65% of Isracard. The dividend was paid in October 2019.
- The following Board Members took office: Mr. David Avner, Dr. David Zvilichovsky, and Mr. Noam Hanegbi.
- On October 6, 2019 the Board of Directors resolved to appoint to the Board of Management of the Bank: Ms. Dalit Raviv, as Head of Retail Banking; Mr. Amit Oberkovitch, as Head of Human Resources, and Mr. Ram Gev, as Head of Finance (CFO).
Key developments in the financial statements for the third quarter of 2019:
- Total income from regular financing activity, totaled NIS 2,387 million in the third quarter of 2019, compared with NIS 2,356 million in the same period last year, an increase of 1.3%.
Negative CPI of 0.7% in the third quarter of 2019, resulted in an expense of NIS 76 million, compared with an income of NIS 19 million in the same period last year. Excluding the CPI effect in the reported quarter, total income from regular financing activity, would have increased by 5.4% compared with the corresponding quarter last year. - Fees and other income in Israel, totaled NIS 826 million in the third quarter of 2019, compared with NIS 835 million in the same period last year, a decline of 1.1%.
- Net provision for credit losses, recorded an income of NIS 40 million in the third quarter of 2019, representing 0.05% of the average credit to the public, compared with an expenses of NIS 118 million in the same period last year, representing 0.17% of the average credit to the public.
- Gross provision for credit losses, stood at 0.36% in the third quarter of 2019, compared with 0.59% in the same period last year.
- Operating and other expenses, totaled NIS 1,970 million in the third quarter of 2019, compared with NIS 1,984 million in same period last year, a decline of 0.7%. The decline was partially due to a decline in salary expenses associated with the Bank's ongoing efficiency measures.
Key developments in balance sheet items for the third quarter of 2019:
- Consolidated balance sheet, as at September 30, 2019, totaled NIS 453.3 billion, compared with NIS 460.9 billion at the end of 2018, a decline of 1.6%.
- Net credit to the public, totaled NIS 291.0 billion, compared with NIS 282.5 billion at the end of 2018, an increase of 3.0%.
Consumer credit in Israel, totaled NIS 42.3 billion, compared with NIS 44.1 billion at the end of 2018, a decline of 4.0%.
Housing loans in Israel, totaled NIS 87.3 billion, compared with NIS 81.5 billion at the end of 2018, an increase of 7.2%.
Credit to small business in Israel, totaled NIS 31.1 billion, compared with NIS 32.6 billion at the end of 2018, a decline of 4.4%.
Credit to the commercial segment in Israel, totaled NIS 40.0 billion, compared with NIS 37.5 billion at the end of 2018, an increase of 6.7%.
Credit to the corporate segment in Israel, totaled NIS 75.5 billion, compared with NIS 71.9 billion at the end of 2018, an increase of 5.0%. Corporate credit balances include NIS 3.6 billion of previously consolidated loans provided to Isracard recognized for the first time in the second quarter of 2019. - Deposits from the public, totaled NIS 348.0 billion, compared with NIS 352.3 billion at the end of 2018, a decline of 1.2%.
- Deposits from consumers in Israel, totaled NIS 187.0 billion, compared with NIS 187.1 billion at the end of 2018.
- Deposits from small businesses in Israel, totaled NIS 43.8 billion, compared with NIS 42.4 billion at the end of 2018, an increase of 3.3%.
- Shareholders' equity, totaled NIS 39.2 billion at the end of the third quarter of 2019, compared with NIS 37.5 billion at the end of 2018, an increase of 4.5%.
- Total capital ratio, stood at 15.16% as at September 30, 2019, compared with 14.39% as at December 31, 2018.
Please note: This press release was prepared for convenience only. In case of any discrepancy, the Bank's reported financial statements in Hebrew will prevail.
Conference Call Information:
Bank Hapoalim will host a conference call today to discuss its quarterly financial results at 5:00 p.m. (Israel); 3:00 p.m. (UK); 10:00 a.m. (ET). To access the conference call, please dial: 1-888-281-1167 toll free from the United States; 0-800-051-8913 toll free from the United Kingdom; or 972-3-9180685 internationally. No password is required.
The call will be accompanied by a slide presentation, which, together with the financial statements, will be available on the Bank's website at www.bankhapoalim.com, under Investor Relations, Financial Information. A recording of the call will be available on the Bank's website at the above address one business day following the completion of the call.
Please note: The conference call does not replace the need to peruse the immediate reports and the Financial Statements of the Bank, including all the forward-looking information included therein in accordance with Section 32A of the Israeli Securities Law, 1968.
About Bank Hapoalim:
Bank Hapoalim is Israel's leading financial group. In Israel, the Bank Hapoalim operates 222 full-service retail branches, 12 regional business centers and specialized industry relationship managers for major corporate customers. The Bank Hapoalim Group includes holdings in Isracard Ltd, Israel's leading credit card company, as well as financial companies involved in investment banking, trust services and portfolio management. Internationally, commercial banking services are provided in North America by the New York branch. Bank Hapoalim is listed on the Tel Aviv Stock Exchange (TASE: POLI) and holds a Level-1 ADR program. For more information about Bank Hapoalim, please visit us online at www.bankhapoalim.com
Contact:
Karen Mazor, SVP
Head of Investor Relations
Bank Hapoalim
T: +972 3 5673440
E: Karen.mazor@poalim.co.il
Table 1-1: Condensed financial information and principal performance indicators over time
| For the three months ended | For the nine months ended | For the year ended December 31 | |||||||||||||||
| September 30, 2019 | September 30, 2018 | September 30, 2019 | September 30, 2018 | 2018 | |||||||||||||
| Main performance indicators | |||||||||||||||||
| Return of net profit on equity attributed to shareholders of the Bank(1) | 7.63 | % | 10.67 | % | 8.43 | % | 9.23 | % | 7.06 | % | |||||||
| Return of net profit on equity attributed to shareholders of the Bank excluding extraordinary items(1)(2) | 8.30 | % | 11.02 | % | 8.40 | % | 9.56 | % | 9.74 | % | |||||||
| Return of net profit from continued operations on equity attributed to shareholders of the Bank(1)(7) | 7.46 | % | 9.41 | % | 7.52 | % | 8.18 | % | 6.07 | % | |||||||
| Return of net profit from continued operations on equity attributed to shareholders of the Bank excluding extraordinary items(1)(3)(7) | 8.13 | % | 9.76 | % | 7.97 | % | 8.52 | % | 8.75 | % | |||||||
| Return on average assets(1) | 0.65 | % | 0.84 | % | 0.71 | % | 0.74 | % | 0.57 | % | |||||||
| Ratio of income to average assets | 1.61 | % | 1.68 | % | 2.29 | % | |||||||||||
| Efficiency ratio – cost-income ratio from continued operations | 62.20 | % | 57.19%* | 59.58 | % | 58.87%* | 65.05 | % | |||||||||
| Efficiency ratio – cost-income ratio excluding extraordinary items from continued operations(3) | 61.01 | % | 56.33%* | 58.49 | % | 57.98%* | 57.70 | % | |||||||||
| Financing margin from regular activity(1)(4) | 2.23 | % | 2.29 | % | 2.28 | % | 2.27 | % | 2.31 | % | |||||||
| Liquidity coverage ratio(5) | 124 | % | 122 | % | 124 | % | 122 | % | 120 | % | |||||||
| As at | December 31 | ||||||||||||||||
| September 30, 2019 | September 30, 2018 | 2018 | |||||||||||||||
| Ratio of common equity Tier 1 capital to risk components(6) | 11.87 | % | 11.32 | % | 11.16 | % | |||||||||||
| Ratio of total capital to risk components(6) | 15.16 | % | 14.77 | % | 14.39 | % | |||||||||||
| Leverage ratio(6) | 7.92 | % | 7.63 | % | 7.51 | % | |||||||||||
| * Reclassified. Expenses in respect of insurance for Sale Law guarantees are stated as a reduction of income from financing transaction fees, instead of being recorded within the “other expenses” item. | |||||||||||||||||
| (1) Calculated on an annualized basis. | |||||||||||||||||
| (2) Does not include expenses in respect of the update of the provision in connection with the investigation of the Bank Group’s business with American customers, the effect of the closure of the private-banking activity overseas, net profit from the sale of Isracard, and loss from impairment in respect of the Bank’s investment in Bank Pozitif. | |||||||||||||||||
| (3) Does not include expenses in respect of the update of the provision in connection with the investigation of the Bank Group’s business with American customers, the effect of the closure of the private-banking activity overseas, and loss from impairment in respect of the Bank’s investment in Bank Pozitif. | |||||||||||||||||
| (4) Financing profit from regular activity (see the Report of the Board of Directors and Board of Management, in the section “Material developments in income, expenses, and other comprehensive income”) divided by total financial assets after allowance for credit losses, net of non-interest bearing balances in respect of credit cards. | |||||||||||||||||
| (5) For additional information, see the section "Liquidity and refinancing risk", in the condensed financial statements. | |||||||||||||||||
| (6) For additional information, see the section "Capital, capital adequacy, and leverage", in the condensed financial statements. | |||||||||||||||||
| (7) The return of net profit from continued operations is mainly influenced by the capital surplus arising, among other matters, from the sale of approximately 65% of the shares of Isracard. In September 2019, the Bank declared the distribution of part of the aforesaid capital surplus as a dividend, in the amount of NIS 1 billion. | |||||||||||||||||
Table 1-1: Condensed financial information and principal performance indicators over time (continued)
| For the three months ended | For the nine months ended | For the year ended December 31 | |||||||||||||||
| September 30, 2019 | September 30, 2018 | September 30, 2019 | September 30, 2018 | 2018 | |||||||||||||
| Main credit quality indicators | |||||||||||||||||
| Allowance for credit losses as a percentage of credit to the public | 1.35% | 1.33% | 1.35% | 1.33% | 1.31% | ||||||||||||
| Impaired debts and debts in arrears of 90 days or more as a percentage of credit to the public | 1.29% | 1.30% | 1.29% | 1.30% | 1.23% | ||||||||||||
| Net charge-offs as a percentage of average credit to the public(1) | 0.01% | 0.15% | 0.10% | 0.17% | 0.20% | ||||||||||||
| Provision for credit losses as a percentage of average credit to the public(1) | (0.05%) | 0.17% | 0.18% | 0.21% | 0.22% | ||||||||||||
| Main profit and loss data | |||||||||||||||||
| NIS millions | |||||||||||||||||
| Net profit attributed to shareholders of the Bank | 736 | 950 | 2,428 | 2,498 | 2,595 | ||||||||||||
| Net profit attributed to shareholders of the Bank excluding extraordinary items(2) | 798 | 980 | 2,419 | 2,588 | 3,579 | ||||||||||||
| Net profit from continued operations attributed to shareholders of the Bank | 720 | 841 | 2,170 | 2,219 | 2,231 | ||||||||||||
| Net profit from continued operations attributed to shareholders of the Bank excluding extraordinary items(3) | 782 | 871 | 2,298 | 2,309 | 3,215 | ||||||||||||
| Net interest income | 2,283 | 2,228 | 7,026 | 6,616 | 8,906 | ||||||||||||
| Provision (income) for credit losses | (40) | 118 | 400 | 424 | 613 | ||||||||||||
| Net financing profit** | 2,341 | 2,634 | 7,339 | 7,611 | 10,351 | ||||||||||||
| Non-interest income | 884 | 1,241* | 2,775 | 3,547* | 4,868 | ||||||||||||
| Of which: fees | 815 | 822* | 2,404 | 2,492* | 3,318 | ||||||||||||
| Operating and other expenses | 1,970 | 1,984* | 5,839 | 5,983* | 8,960 | ||||||||||||
| Of which: salaries and related expenses | 1,010 | 1,020 | 3,071 | 3,126 | 4,097 | ||||||||||||
| Total income | 3,167 | 3,469* | 9,801 | 10,163* | 13,774 | ||||||||||||
| Net earnings per ordinary share (in NIS) | |||||||||||||||||
| Net profit attributed to shareholders of the Bank | 0.55 | 0.71 | 1.82 | 1.87 | 1.95 | ||||||||||||
| * Reclassified. Expenses in respect of insurance for Sale Law guarantees are stated as a reduction of income from financing transaction fees, instead of being recorded within the “other expenses” item. | |||||||||||||||||
| ** Net financing profit includes net interest income and non-interest financing income (expenses). | |||||||||||||||||
| (1) Calculated on an annualized basis. | |||||||||||||||||
| (2) Does not include expenses in respect of the update of the provision in connection with the investigation of the Bank Group’s business with American customers, the effect of the closure of the private-banking activity overseas, net profit from the sale of Isracard, and loss from impairment in respect of the Bank’s investment in Bank Pozitif. | |||||||||||||||||
| (3) Does not include expenses in respect of the update of the provision in connection with the investigation of the Bank Group’s business with American customers, the effect of the closure of the private-banking activity overseas, and loss from impairment in respect of the Bank’s investment in Bank Pozitif. | |||||||||||||||||
Table 1-1: Condensed financial information and principal performance indicators over time (continued)
| September 30 | December 31 | ||||||||||||||
| 2019 | 2018 | 2018 | |||||||||||||
| NIS millions | |||||||||||||||
| Main balance sheet data | |||||||||||||||
| Total assets | 453,347 | 447,921 | 460,926 | ||||||||||||
| Of which: Cash and deposits with banks | 72,517 | 77,622 | 84,459 | ||||||||||||
| Securities | 65,592 | 57,943 | 56,116 | ||||||||||||
| Net credit to the public | 291,007 | 275,806 | 282,507 | ||||||||||||
| Net problematic credit risk | 7,761 | 7,026 | 6,944 | ||||||||||||
| Net impaired balance sheet debts | 2,295 | 2,238 | 2,158 | ||||||||||||
| Credit to the public not accruing interest income (NPL) | 2,401 | 2,218 | 2,178 | ||||||||||||
| Total liabilities | 414,086 | 410,203 | 423,270 | ||||||||||||
| Of which: Deposits from the public | 348,027 | 341,775 | 352,260 | ||||||||||||
| Deposits from banks | 3,178 | 4,357 | 4,528 | ||||||||||||
| Bonds and subordinated notes | 28,337 | 28,647 | 30,024 | ||||||||||||
| Shareholders’ equity | 39,218 | 37,613 | 37,544 | ||||||||||||
| Additional data | |||||||||||||||
| Share price at end of period (in NIS) | 26.7 | 26.6 | 23.7 | ||||||||||||
| For the three months ended | For the nine months ended | For the year ended December 31 | |||||||||||||
| September 30, 2019 | September 30, 2018 | September 30, 2019 | September 30, 2018 | 2018 | |||||||||||
| Total dividend per share (in agorot)** | 74.90 | - | 74.90 | 37.17 | 37.17 | ||||||||||
| Ratio of fees to average assets | 0.18% | 0.19%* | 0.53% | 0.55%* | 0.73% | ||||||||||
| * Reclassified. Expenses in respect of insurance for Sale Law guarantees are stated as a reduction of income from financing transaction fees, instead of being recorded within the “other expenses” item. | |||||||||||||||
| ** According to the date of declaration. | |||||||||||||||